Home Affairs Ministry prepares Rp1 trillion for high-performing regional incentives
The Ministry of Home Affairs (Kemendagri) has prepared a budget of Rp1 trillion for fiscal incentives for high-performing regional governments.
Home Affairs Minister Tito Karnavian, during a working meeting with Commission II of the DPR RI at Senayan, Jakarta, on Thursday, stated that the scheme had been implemented in 2026 and is projected to be continued next year.
“This year we have been working to carry out award-giving activities for high-performing regions, divided into six regions with a budget allocation of Rp1 trillion,” he said.
He noted that the budget had temporarily been reallocated by the Ministry of Finance, resulting in a reduction. However, he considers this programme must be maintained to create a competitive climate between regions. “We are still proposing that next year a budget of Rp1 trillion be allocated for regional fiscal incentives,” he stated.
Meeting with reporters afterwards, he explained that regional governments are considered high-performing based on various quantitative achievements, such as controlling inflation, reducing unemployment and poverty, and generating local own-source revenue (PAD).
According to him, in addition to supplementing regional income and expenditure budgets, the award also aims to create a competitive climate so that regional governments improve their performance mutually. He explained that the regional fiscal incentive programme, previously known as the regional incentive fund, was under the Ministry of Finance before being transferred to the Ministry of Home Affairs.
“We are in an awkward position—the Ministry of Home Affairs keeps applying pressure, occasionally giving punishment, yet the reward is only a trophy, while the Ministry of Finance provides the fiscal incentive. So, I communicated to the Ministry of Finance at that time, please hand over a portion to the Ministry of Home Affairs which hosts the event, so I am not constantly ‘beating up’ regional heads,” he said.